IKEA’s International Strategy

Please, select a company from emerging markets to describe and analyze its international strategic moves over
last three to ten years’ period or analyze the failure of one European based MNE in overseas market. Describe
the apparent international strategy it pursues and discuss its adequacy and effectiveness.

Use some of the conceptual tools seen in class. Suggested number of words: 1,500 to 3,000. This final report has
to be submitted to the lecturer within two weeks (10 working days) immediately after the course lectures of each
group finish. A successful submission of your final report must meet the following conditions:
a. The softcopy of final report has to be either in WORD or PDF format.
b. The file name of your final report (softcopy) has to be: ST512E2017_GROUP NAME_YOUR LAST
NAME_YOUR GIVEN MAE_YOUR STUDENT NUMBER. Your group name will be determined when the lecture
starts (you will find it one the attendance list). This file name has to be mentioned in your title page of final report.
c. In addition to the softcopy of your final report, a hardcopy of printed report has to be handed to the lecturer (to
the office of the lecturer) by the deadline.
d. Any late submission of the final report, either the softcopy or hardcopy, will be considered as submission failure,
except a written confirmation from the lecturer in advance.
e. Other topics beyond the above mentioned two options for the final report will be considered as failure, unless
the student’s chosen topic has been approved by the lecturer before the lectures finish.
f. Spelling and grammar mistakes can be tolerated, if the total number of such mistakes and errors is less than 24.

Plagiarism is copying another’s work or ideas. This includes sections (sentences, tables, diagram) of books or
articles, another student’s work or text, diagram, data from the internet without proper referencing etc. Adding your
name to group work in which you have not participated or letting a student who has not participated add his/her
name to work is also considered as an offence and will lead to disciplinary action for all involved.
Plagiarism in any assessed work (continuous assessment, examinations and projects) is considered as a serious
offence and will lead to disciplinary action.
Other forms of academic dishonesty are subject to disciplinary sanctions. Academic dishonesty, other than
plagiarism may take any number of forms such as submission of the work more than once whether the earlier
submission was at another institution, unless prior approval has been obtained, cheating on an examination, aiding
another student’s dishonesty, unauthorized or inappropriate use of computers, calculators and other forms of
technology in course work, assignments or examinations.

Company Background

IKEA is a multinational company that was founded in 1943 by Ingvar Kamprad in Sweden. Initially, the company was selling pens, wallets and picture frames. The success of the company led to an upgrade, where in 1958, the company specialized in the development and marketing of furniture products. The company became the leading Swedish Furniture Company, selling products from the local manufactures (Twarowska & Kąkol, 2013). Subsequently, it drew attention from consumers and had a positive reputation in the market. Resultantly, the company started to develop its own furniture through self-assembly, in an effort to reduce the storage space required for supply from suppliers. The company also focused on expanding its business lines to include restaurant and kitchenware. All the products were designed in an innovative manner compared to other manufacturers. The company also benefited due to its capability for mass production and effective marketing that included launching in the European market for early venture and network. The company grew significantly with the supply of quality Scandinavian furniture designs. The company also expanded its distribution by investing in opening up new stores in the 1950’s (Binh, 2012).

The company’s business strategy was a key contributor to the company’s success. The main theme behind the success and uniqueness of the company includes supplying products at a low price, innovation, and a competitive approach that was guided in helping create a better life. Subsequently, the high quality, good function, and design, as well as the low pricing strategy increased the market share and customer base across Europe. With the expansion, the company adopted a complicated supply chain that involved suppliers from various parts of the world. The strategic approach of expansion also involved the acquisition of some factories that are used as training units to set the standards for the other suppliers (Sandybayev, 2017). Subsequently, this has facilitated economic production, maintaining standards, and sustainability, including awareness of the environment. IKEA ensures that the supply of products is environmentally sustainable and cost-effective for the customer. The delivery is done in flat packs, which facilitate mass transportation and reduced costs in logistics. In the recent past, the company had over twenty-five regional distribution centers that are spread in over 14 nations. These centers supply the products to IKEA stores in a different region (Sandybayev, 2017). The competitive advantage of the organization in the international markets is based on its wide experience in the retailing sector, leadership, effective pricing strategy, quality products, and a strong corporate reputation (Twarowska & Kąkol, 2013).

The Rationale for Internationalization Business goes international for various reasons, with the primary goal of fostering organizational growth and expansion. International strategies are essential in increasing diversity in the workforce to enhance innovation…

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